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Informist, Thursday, Sept. 11, 2025

MUMBAI – Crisil Ratings expects the overall revenue of home textile manufacturers to decline 5-10% in the current financial year due to the US' 50% tariffs on Indian goods from Aug. 27. This is based on the ratings agency's analysis of 40 home textile companies which account for 40-45% of the industry's revenue, it said in a report Thursday. The impact is expected to be more pronounced for companies that generate more than half of their revenue from the US, it said. 

Home textiles are discretionary products and their exports to the US grew only 2-3% in the June quarter as retailers remained cautious about demand amid inflationary concerns, Deputy Chief Rating Officer Manish Gupta said in the report. Exports were sharply up before the 50% US tariff implementation because of some frontloading of orders, he said. 

However, the fall in revenue will likely be limited as India is expected to retain its competitive position in the US market in the near term. This is because of the limited capacity competing countries--such as China, Pakistan and Turkey--to make cotton-based home textile products, frontloading of sales during Apr-Aug and, likely diversification of Indian manufacturers to alternative geographies, Crisil Ratings said. Additionally, deleveraged balance sheets will partly offset the impact on credit profiles, it said.

Indian home textile manufacturers would also try to increase trade with the EU and the UK, which together accounted for about 13% of India's home textile exports in 2024-25 (Apr-Mar). The recent free trade agreement between India and the UK is expected to shift exporters' focus to the latter country as well as the EU. 

Scaling up revenue from alternative export destinations will take some time and the operating profitability on exports to the US may decline 200-250 basis points in FY26 compared with FY25, Crisil Ratings Director Gautam Shahi said. This will be because of likely fall in demand due to inflation in the US and absorption of tariff-related costs, he said. "The potential oversupply may also affect the profitability of exports to other destinations as well as in the domestic market."

India's home textile market was worth INR 810 billion in FY25, of which revenue from US exports was INR 320 billion and domestic sales were INR 260 billion, the rating agency said. For FY26, the total market size is expected to be INR 730 billion-INR 770 billion. Of this, about INR 230 billion-INR 270 billion is expected from US exports and INR 260 billion-INR 270 billion will likely be domestic revenue, it said.  End

Reported by Anjana Therese Antony

Edited by Akul Nishant Akhoury

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